G-20 Recap: Global Financial Coordination Continues
Executive compensation, promises of financial reform, and how to implement policy exit strategies were focal points of the G-20 meeting in London over the weekend. Results of the meeting seem fairly minor, but the lack of large font headlines is probably a good thing. Like plane landings, global co-ordination and policy agreement rarely make headlines.
Even before the meeting, Treasury Secretary Tim Geithner said the meeting was unlikely to produce new initiatives. Member nations were instead giving updates on how financial reforms were progressing. A chance to plot new initiatives will be two weeks from now, when another G-20 meeting is to be held in Pittsburgh.
There, a proposal on global standards of pay disclosure and structure is expected to be issued by the Financial Stability Board (FSB), the Basel-based body of regulators.
After the London meeting, Geithner said “the financial system is showing signs of repair” following “the greatest challenge to the world economy in generations.”
In the past, policy-makers have responded too late to crises or reversed accommodative measures too early, Geithner said, but the G-20 will learn from history and only tighten policy when a strong foundation has been built.
“Our strategies will need to evolve as we move from crisis response to recovery, from rescuing the economy to repairing and rebuilding the foundation for future growth,” he said.
Geithner, who was head of the New York Federal Reserve when the credit crunch began, also continued to advocate for financial reform at home and abroad, including on financial regulation, executive compensation, liquidity requirements, and consumer protection. On an international level, he called for more action to prevent crises and re-allocate resources.
“We need the multilateral development banks to focus their efforts on the key priorities of fighting poverty, supporting higher productivity in agriculture, building the institutions necessary for private investment and growth, and facilitating the transition to a green economy,” he said.
A 7-point communiqué from the G-20 can be seen here.
More comments from Geithner are available here.
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